ISLAMABAD: Pakistan is expected to secure the refinancing of a $1.3 billion Chinese commercial loan later this month after finalising terms and conditions with Chinese authorities, according to sources in the Ministry of Finance.
The expected inflow is aimed at providing timely support to the country's foreign exchange reserves while helping the government manage its external financing requirements.
Sources said discussions between Pakistani and Chinese officials are progressing to expedite the refinancing process. Once approved, the funds will help stabilize Pakistan’s foreign exchange reserves following significant external debt repayments made in July.
According to officials, Pakistan repaid $2.2 billion in external debt during July, including the settlement of the $1.3 billion Chinese commercial loan. The refinancing is considered an important step in ensuring sufficient liquidity and maintaining reserve adequacy amid ongoing debt servicing obligations.
The sources further revealed that the State Bank of Pakistan (SBP) plans to purchase more than $7 billion from the interbank market during the current fiscal year. The acquired foreign currency will primarily be used to meet external debt repayments while simultaneously strengthening the country's foreign exchange reserves.
Economic experts believe the refinancing arrangement with China will ease pressure on Pakistan’s external account and reinforce investor confidence. Maintaining healthy foreign exchange reserves remains a key priority for the government as it seeks to ensure macroeconomic stability and fulfill international financial commitments.
Meanwhile, Pakistan has also reported positive developments in another key sector. Federal Minister for National Health Services, Regulations and Coordination Syed Mustafa Kamal recently announced a major breakthrough for the pharmaceutical industry following the successful Pakistan-China Pharmaceutical Business-to-Business (B2B) Conference held in Islamabad.
Speaking at a press conference, the minister said the conference resulted in agreements worth $629.5 million, aimed at attracting foreign investment, expanding local pharmaceutical manufacturing, and reducing Pakistan’s dependence on imported medicines.
He added that the initiative reflects the government's commitment to promoting Pakistan as an attractive investment destination. According to the minister, showcasing such achievements is essential to improving the country's international image, strengthening investor confidence, and supporting long-term economic growth through enhanced industrial cooperation with China.
